The On-Demand Economy Isn’t Just For Big Cities Anymore. Grubhub Expanded To 200 Cities In 2018

By Ally Marotti
Chicago Tribune

WWR Article Summary (tl;dr) In towns and cities new to the on-demand economy, people don’t yet turn to their smartphones every time they need a ride or a quick lunch. But as Ally Marotti reports, residents and businesses in smaller communities are starting to catch on to the trend.


As a recent gray day turned to night, Grubhub delivery driver Robert Wold’s phone chimed. Orders were coming in, one right after the other.

It was the kind of early December evening that wasn’t inviting for a night out. Snow lingered on the ground from a storm the previous week, and it crunched under Wold’s boots as he got out of his car to make deliveries.

Grubhub delivery is new to Rockford, as are many services users can access with a tap of their smartphones.

In metro areas, the services have been available more than half a decade, and many people expect to be able to order virtually any service or food via their mobile devices.

But in Rockford, a city of roughly 147,000 people about 75 miles northwest of Chicago, on-demand services are still a relative novelty.

In towns and cities new to the on-demand economy, people don’t yet turn to their smartphones every time they need a ride or a quick lunch. The streets aren’t clogged with ride-share or delivery drivers, and the battles between tech companies and incumbent industries like hotels or taxis have been muted.

Still, residents and businesses in Rockford are starting to feel the effects.

Grubhub orders have turned into a significant revenue stream for at least one local restaurant. Drivers like Wold, a 54-year-old Naperville native who moved his family to Rockford in 2018 to be near his mother-in-law, are coming to depend on the flexible schedules the gig economy affords. Residents are growing more accustomed to the convenience of food deliveries, and travelers use Grubhub to order in to their hotels.

Forming habits like that takes time. Rockford Taco Bell franchisee Lee Engler wants to be there with delivery service as people come to expect it.

“You don’t have to go to the food; the food can come to you,” Engler said. “We view it as something that’s really an advance in the marketplace for now, but eventually I think delivery is going to be prevalent everywhere.”

‘When there’s a blizzard, we make snowmen’
Chicago-based Grubhub underwent a massive expansion in 2018, bringing its delivery service to more than 200 new cities and towns.

It entered into a partnership with Yum Brands in February, and the company’s Taco Bell and KFC chains were anchor restaurants for many of Grubhub’s new markets. The cities and towns to which the service expanded largely fall outside major metro areas and are later adopters of the on-demand economy, Rockford included.

A few Rockford restaurants have been using Grubhub’s ordering platform since 2012. But daily orders have increased fivefold since the company launched delivery in Rockford last summer, said Adam DeWitt, Grubhub’s president and chief financial officer. He declined to give exact order numbers.

For food-delivery aficionados in Rockford, RBI’s Bar & Grill is synonymous with Grubhub.

Located off bustling Perryville Road, RBI’s is the kind of place that serves breakfast until midnight and burgers at 7 a.m. Its menu spans from lobster mac and cheese to Fruity Pebbles French toast.

Delivery makes up 10 percent of RBI’s business, and about 60 percent of delivery orders come through Grubhub, owner and operator Andy Roiniotis said.

RBI’s has been on Grubhub since 2014 and employs its own delivery drivers. Grubhub orders have jumped since the company rolled out delivery in town and more diners started using the app. Sales through Grubhub went up 22 percent in the 90 days leading up to Dec. 4, Roiniotis said.

Roiniotis has doubled down on the technology, learning how to read the data the platform generates and adjust his strategy accordingly. He monitors for slow times to decide when to run promotions and for busy times to know when to add an extra delivery driver. He’s figuring out when to depend on the service, and a late-November snowstorm that dropped almost a foot of snow on Rockford was one of those times.

The business RBI’s did through Grubhub that day offset the income the restaurant lost from diners who stayed home due to the crummy weather, Roiniotis said.

“We preach, ‘When there’s a blizzard, we make snowmen,’ ” he said. “We don’t take off; we use Grubhub.”

‘We’ve never delivered’
Rockford resident Misty Clark remembers when RBI’s was one of the only restaurants in town on Grubhub.

When dozens of restaurants joined the platform over the summer, her horizons expanded. She now orders food from restaurants on the opposite side of town and tries new places when they run promotions on the app. Clark uses Grubhub religiously, she said, whether its for dinner at home with her husband or for lunch while she’s at work.

“I work on the third floor of a building, it’s cold out, I’m not trying to go trek for lunch everyday,” said Clark, 32. “We get a half an hour, which is not a lot of time to get in the car, go get something and get back. You’ve got 8 minutes to eat it.”

Clark and her friends use other on-demand services too. She has tried DoorDash, which delivers in Rockford as well, and a friend has ordered groceries from Shipt, which does the shopping for users. Uber and Lyft also operate in the Winnebago County seat.

But not everyone in Rockford has jumped on the mobile food ordering train.

Most of the patrons dining at Panino’s Italian Restaurant on East State Street during a recent lunch rush had never used Grubhub.

An attorney finishing his food said he tries to avoid depending too much on technology. A few tables over, three men taking the last bites of their sandwiches and chili agreed they wouldn’t want to pay an extra delivery fee when they had time to kill during lunch anyway.

One of them, 53-year-old Bob Reesor, was sure his college-age kids have used the service.
“They wouldn’t get off their butt if the place was on fire,” he said.

But behind the counter, where workers made 17-inch sandwiches and baked Panino’s signature fresh loaves of bread, at least two orders had just come in through Grubhub.

“We’re actually picking up more business through (Grubhub),” said Tiffany Pabon, a 26-year-old employee at the locally owned restaurant.

Grubhub orders have kept workers busy during normally slow times between lunch and dinner, Pabon said. She’s noticed items that aren’t often ordered in the dining room being ordered through the platform, and having delivery drivers pick up catering orders has also been a help, she said.

Panino’s two locations do less than 10 percent of their business through Grubhub, said owner Frank Savitski. But he expects that will increase.

“We can see the growth of it because we’ve never delivered,” he said.

Not if, but how
During Grubhub’s third-quarter earnings call in late October, CEO and founder Matt Maloney said it’s no longer a question of if chains and independent restaurants should move into online ordering and delivery, but how.

Some Rockford restaurants new to Grubhub are still trying to figure that out.

Dusty Boots Saloon & Eatery, a country-themed sports bar with a cow skull hanging above the bar, gets at least 10 Grubhub orders a week, manager Jenna Joyner said.

She wanted to give the service a try but isn’t sure it adds much to what Dusty Boots offers.
“Our food is not the draw,” Joyner said.

While not every restaurant is seeing sales take off, the number of active diners Grubhub is adding to its platform through new markets like Rockford is driving the growth of the company.

The summer is usually slower for Grubhub, Maloney said during the call. This year, however, more people tried Grubhub for the first time during the third quarter than any quarter before. That brought the platform’s total number of active diners to 16.4 million, a 67 percent increase from the year prior.

New diners mean more orders, Maloney said. Grubhub’s net revenue of $247 million in the third quarter was up 52 percent from the previous year.

Grubhub driver Wold worked the first day the company launched delivery in Rockford. There wasn’t much business then, he said.

“It changed like that,” he said, snapping his fingers. “I just don’t think people out here were used to ordering things online, having an app on their phone.”

Wold made three consecutive deliveries in two hours on a Tuesday evening in early December. One order from a Mexican restaurant included a few tacos. Another from a brewery filled the red Grubhub-branded cooler bag Wold carried.

A customer staying at the Holiday Inn off Interstate 90 ordered a Stuft Burrito combo, chips and nacho cheese sauce from Taco Bell.

“People are really counting on this,” said Wold, as he drove toward Taco Bell to pick up the order.

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